SOFIA (Reuters) - Bulgaria’s prime minister urged the central bank and intelligence service on Tuesday to look into the purchase of key energy assets by a little known local company, denying any involvement in or backing for the deal.
Czech utility CEZ signed a contract on Friday to sell a power distributor that provides electricity to over three million Bulgarians along with other assets to small Bulgarian solar energy producer Inercom.
The deal prompted concerns across the political spectrum that strategic energy assets in the European Union country were passing into the hands of owners about which little was known.
In an emotional briefing to parliament, Boyko Borissov said neither he nor the government were “participating in a dark, behind the scenes, deal.”
“Not only are we not participating, we have no influence whatsoever on it,” he told reporters.
Inercom, with assets worth around 100 million levs ($63 million), is set to acquire a business with annual turnover of about 1.8 billion levs ($1.1 billion) that operates one third of the Balkan country’s power grid.
The deal, estimated to cost about 320 million euros ($392 million), is pending approval by Bulgaria’s anti-trust regulator. Inercom has said it will be financed by bank loans, but has declined to elaborate.
Energy prices are politically sensitive in the EU’s poorest member state, and a spike in electricity bills in 2013 toppled Borissov’s first government. He conceded the current furor was reminiscent of this, but said he would not step down.
Borissov said he had received confidential documents on the deal from his Czech counterpart Andrej Babis that showed the involvement of Russian-Georgian offshore companies, as well as Russian and Bulgarian banks.
Borissov said Bulgaria did not have a mechanism to stop a deal between two private entities, but pledged to use all state resources to provide transparency over the deal and urged state institutions to step in.
He also suggested he might not accept the resignation of the energy minister, who decided to step down over links with Inercom’s owners to try to assuage any doubts of government influence on the deal.
On Friday, opposition Socialists demanded the sale be stopped and urged the government to bid in a new sale process.
Borissov, who has previously dismissed Socialists’ calls for the state to buy back private energy assets, said the government was considering legal changes that would allow the state to have a say in similar deals.
Austria’s EVN and Czech firm Energo-Pro control Bulgaria’s two other energy distributors.
($1 = 1.5973 leva)
($1 = 0.8171 euros)
Editing by Mark Potter